Strategic management is an ongoing process of managing an organization strategically. This
involves a set of management decisions and actions that result in formulating and implementing
strategies that determine the performance and success of the organization. The focus is primarily
on large-scale, future-oriented strategies that allow an organization to achieve its objectives,
considering the environment in which it operates.

Strategic management requires good strategic thinking to be successful. As
you read this module and study the strategic management model it describes, try to avoid "losing
sight of the forest because of all the trees," i.e., becoming so focused on the model that you lose
sight of the fundamental importance of thinking strategically. Strategy-making is an ongoing
effort that proceeds on two fronts: one proactively through analysis and thought in advance, the
other emerging and/or conceived in response to new developments, special opportunities, and
experience with prior strategic actions. You need to understand the model very well and use it
throughout the course, but your application of the model will be of little value without good
strategic thinking. Please read several times the module on
strategic and critical
thinking.

As we consider business cases, and actual strategic management situations, we are primarily
trying to answer a framework of questions such as: What are the current purposes and strategy of
the firm? What are its strengths and weaknesses? What are the major opportunities and threats
in
the firm's environment? And, how can those organizational capacities and industry opportunities
be related effectively? A complementary perspective is that we are trying to answer three
deceptively simple questions for each organization at a particular time: (1) where are we (the
organization) now? (2) where do we need to or want to be? (3) how do we get there?

Throughout this course, we will use a model of the strategic management process that has
three phases: diagnosis, formulation, and implementation.
These three phases are outlined below, including a summary table, and are discussed in more
detail in three separate modules:

This component or phase of the strategic management process (and case analysis process)
includes: (1) performing a situation analysis (analysis of the internal environment of the
organization), including identification and evaluation of current mission, strategic objectives,
strategies, and results, plus major strengths and weaknesses; (2) analyzing the organization's
external and competitive environment, including major opportunities and threats; and (3)
identifying and discussing the major critical issues, which are a small set of major
problems, threats, weaknesses, and/or opportunities that require particularly high priority
attention by management. You should be sure you are dealing with causal problems rather than
their results and symptoms. Both immediate and long-range problems should receive attention.
The final result or output of the diagnosis phase should be a precise, clear statement of the
critical strategic issues to be addressed.

Formulation

The output of this phase should be a clear set of recommendations, with supporting
justification, that revise as necessary the mission and objectives of the organization, and supply
the strategy and plans for accomplishing them. Your recommendations should cover:

1. Corporate-level strategy - with three components: (a) growth or
directional strategy (what should be our growth objective, ranging from retrenchment through
stability to varying degrees of growth - and how do we accomplish this), (b) portfolio strategy
(what should be our portfolio of lines of business, which implicitly requires reconsidering how
much concentration or diversification we should have), and (c) parenting strategy (how we
allocate resources and manage capabilities & activities across the portfolio - where do we
put special emphasis, and how much do we integrate our various lines of business)

2. Competitive (or business-level) strategy - (i.e., how we will
compete within each business or industry segment)

It is important to consider "fits" between resources plus competencies with opportunities, or
between risks and expectations. A good recommendation should be: effective in solving the
stated problem(s), practical (can be implemented in this situation, with the resources available),
feasible within a reasonable time frame, cost-effective, not overly disruptive, and acceptable to
key "stakeholders" in the organization. In developing your recommendations, especially those to
address the Critical Issues, your process should have three primary elements: (a) formulating a
rich range of strategic alternatives to address the major issues, (b) evaluating the alternatives in
terms of feasibility and expected effects on the problem(s) and other outcomes, (c) deciding on
the alternatives to be implemented/recommended.

Implementation

In business, and in the practice of strategic management, plans must be implemented to
achieve the intended results. The most wonderful plan in the history of the world is useless if not
implemented successfully -- and it is not acceptable just to complain "they didn't support it."
Recommendations about implementation are a vital part of a case analysis, and you will be
expected to provide a specific implementation plan as part of the recommendations for cases.
The
implementation plan is basically a sequence of action steps necessary to bring about the chosen
new (or change in) strategy, derived from considering: what has to be done,
how will it get done, who will do it, when will it be done,
where will it be done, and why are we doing it this way (i.e., provide key
elements of the reasoning). Among the topics to be considered you address these six key
questions and design the implementation steps are: resources (financial, human, physical,
technological) and
including action steps to obtain needed resources that you don't have initially, reward systems,
timing and sequencing of the actions, developing and maintaining support for change,
organization structure, and how to monitor and control the implementation to produce the desired
results.

Developing a detailed implementation plan, as you might do for an important change in a
company, can take a lot of effort and become a lengthy document. However, for the major case
reports in this course, your plan can be much simpler. The final plan would be only 1-2 pages in
a
20-page report, so you can/need not go into great detail. Your final plan should be a numbered
set of the major action steps necessary to effect the strategic change(s) you have recommended,
considering the key six questions plus topics given earlier in this paragraph. You should provide
some text, not just an outline. The steps should be arranged in a sequence that reflects general
timing and constraints.

COMPONENT

DIAGNOSIS

FORMULATION

IMPLEMENTATION

Basic question

Where are we (org. in context of environment)?

Where do we need/want to be?

How do we get there?

Output/product

Set of critical issues (CIs) plus improved understanding of the organization
& its environment